PURSUING ENVIRONMENTAL SUSTAINABILITY IN THE FAST FASHION INDUSTRY
An exploratory qualitative research
Nguyen Ngoc Minh Chau
International Business Bachelor's Thesis Supervisor: Maria Elo
Date of approval: 9 April 2018
Aalto University School of Business
Bachelor´s Program in International Business Mikkeli Campus
PURSUING ENVIRONMENTAL SUSTAINABILITY IN THE FAST FASHION INDUSTRY
An exploratory qualitative research
Nguyen Ngoc Minh Chau
International Business Bachelor's Thesis Supervisor: Maria Elo
Date of approval: 9 April 2018
Aalto University School of Business
Bachelor´s Program in International Business Mikkeli Campus
SCHOOL OF BUSINESS Mikkeli Campus
BACHELOR’S THESIS
Author: Nguyen Ngoc Minh Chau
Title of thesis: Pursuing Environmental Sustainability in the Fast Fashion Industry: A Qualitative Exploratory Research
Date: 9 April 2018
Degree: Bachelor of Science in Economics and Business Administration Supervisor: Maria Elo
Objectives: The main objectives of this study were to explore processes associated with producing fast fashion apparels that negatively impact the environment, to explore the sustainability initiatives that big clothing manufacturers and retailers in the fast fashion industry have adopted, and to explore the reporting practice of fast fashion firms concerning their environmental performance.
Summary: For this study, a qualitative content analysis was conducted to analyze a sample of five corporate reports or sustainability reports of fast fashion companies for the fiscal year of 2016. The findings related to the environmental impact of fast fashion industry were addressed by the literature review, while findings on environmental initiatives and reporting practices on environmental performance of fast fashion companies were based on the content analysis of the reports.
Conclusions: The environmental impact of the fast fashion industry stems from transportation, cultivation of raw materials, processing of fibers, and textile waste. Environmental initiatives taken by fast fashion companies can be categorized into product design, process design, supply chain, and customer engagement and awareness. Reporting practices of fast fashion firms on their performance are found to be focused on certain indicators; putting the environmental indicators within the context of the sustainability measures taken, it can be concluded that the measures bring about positive environmental performance outcomes for companies.
Key words: fast fashion, environmental sustainability, environmental impact, sustainability initiatives, environmental practices, environmental performance, environmental indicators, corporate reports, content analysis
Language: English Grade:
1 INTRODUCTION ... 1
1.1 Research problem ... 1
1.2 Research questions ... 2
1.3 Research objectives ... 2
2 LITERATURE REVIEW ... 2
2.1 The concept of Sustainability and the Triple Bottom Line in business ... 3
2.1.1 Definition of Sustainability ... 3
2.1.2 The concept of Triple Bottom Line ... 3
2.2 The emergence of fast fashion ... 5
2.3 Fast fashion supply chain management ... 6
2.4 Environmental sustainability in fast fashion industry... 9
2.4.1 The trend of global sourcing of clothing ... 9
2.4.2 The “unsustainable” characteristics of the fashion industry ...10
2.4.3 Different approaches to improve environmental performance ...13
2.5 Conceptual framework ...15
3 METHODOLOGY ...17
3.1 Data collection and sample selection ...17
3.2 Data analysis method ...19
4 FINDINGS AND DISCUSSION ...20
4.1 Environmental Practices ...20
4.1.1 Product Design ...26
4.1.2 Process Design ...27
4.1.3 Supply Chain...28
4.1.4 Customer Engagement and Awareness ...29
4.1.5 Actors Involved ...30
environmental practices ...37
4.2.2 Reporting practices of the five sample firms ...39
4.3 Limitations of research ...40
5 CONCLUSION ...41
5.1 Main findings ...41
5.1.1 Environmental impacts of the fast fashion industry ...41
5.1.2 Environmental initiatives taken by fast fashion companies ...42
5.1.3 Reporting practices on environmental performance ...43
5.2 Implications for international business ...44
5.3 Suggestions for future research ...45
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1 INTRODUCTION
Sustainable development has become a responsibility rather than a mere trend after the 17 Sustainable Development Goals of the 2030 Agenda for Sustainable Development was introduced by United Nations at the start of 2016 (www.un.org). Among the 17 Goals, already five of them directly address the environment. Indeed, environmental sustainability has become a centerpiece for managers working across industries that have negative impact on the environment, and the fashion industry is not an exception. The increasing public awareness of environmental issues during the last decade has urged clothing retailers and manufacturers to adopt practices that cause less harm to the environment (Chen & Burns, 2006). Just last year, a film named “River Blue” was released, exploring how rivers and waterways have been heavily polluted by the textile industry and affected the lives of many people (River Blue, 2017). It is apparent that the issues concerning environmental sustainability in the fashion industry have received much attention among both the press and especially the academia. Therefore, this paper seeks to explore various environmental impacts of the fast fashion industry, the environmental sustainability initiatives taken by fast fashion firms, as well as their environmental performance reporting practices.
1.1 Research problem
Clothes are undoubtedly so indispensable in daily life that their presence has been taken for granted. However, it is not so widely known that the apparel industry is one of the largest industrial polluters, second only to oil (Sollano, 2017). The processing of materials and textiles as well as the manufacture and distribution of clothes have altogether put an extremely heavy strain on the environment. Specifically, the advent of fast fashion in the last couple of decades as a response to changes in the fashion industry has further exacerbated the issue with its low cost and flexibility in design, quality, delivery, and speed to market (Bhardwaj & Fairhurst, 2009). Many fast fashion firms have attempted to mitigate their environmental impact through numerous sustainability initiatives, which have brought favorable outcomes overall considering the environmental performance indicators that these companies report on.
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1.2 Research questions
In view of the aforementioned research problem, this paper attempts to address the following research questions:
1. What are the environmental impacts of the fast fashion industry that make environmental sustainability a challenge for this sector?
2. Which practices have been adopted by fast fashion firms to tackle the challenge of environmental sustainability and to improve their environmental performance?
3. How do fast fashion companies assess their environmental performance?
1.3 Research objectives
Corresponding to the proposed research questions, four research objectives have been established.
1. To explore processes associated with producing fast fashion apparels that negatively impact the environment.
2. To explore the sustainability initiatives that big clothing manufacturers and retailers in the fast fashion industry have adopted.
3. To explore the reporting practice of fast fashion firms concerning their environmental performance.
This study is structured into five main sections: Introduction, Literature Review, Methodology, Findings & Discussion, and Conclusion. Following the literature review, there is a conceptual framework that serves as the foundation for the empirical analysis of this paper.
2 LITERATURE
REVIEW
This literature review seeks to perform a structured review of available literature concerning the environmental sustainability issue particularly in fast fashion, a phenomenon that has emerged in response to changes in the fashion industry. This literature is structured in four main sections. First, the concepts of sustainability and the triple bottom line associated with it are explained. Second, the changes in the
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fashion industry that lead to the advent of fast fashion are explored. Third, there is a review of literature with regards to the supply chain management of fast fashion. Fourth, various issues associated with environmental sustainability in the fashion industry are examined, including the globalization trend of clothing production, the unsustainable characteristics of the fashion industry, and the different sustainability initiatives that have been adopted. Finally, a conceptual framework that aims to visualize concepts and provide a basis for empirical analysis is illustrated.
2.1 The concept of Sustainability and the Triple Bottom Line in
business
2.1.1 Definition of Sustainability
The concept of “sustainability”, also known as “sustainable development”, was originally defined by the United Nation’s World Commission on Environment and Development (1987: 41) as the capability “[to meet] the needs of the present without compromising the ability of future generations to meet their own needs”. More specifically at the organizational level, sustainability was given the definition of “meeting the needs of its stakeholders without compromising its ability to meet their needs in the future” (Hockerts, 1999: 32). However, the interpretation of sustainable development from a corporate perspective is sometimes rather different; managers mainly associate corporate sustainability with the economic performance, neglecting the other two, and focus on the maximization of shareholder value, market share, and innovation (Bansal, 2002). Sustainability can be perceived differently depending on each organization’s strategy, whether as “a compliance issue, a cost to be minimized, or an opportunity for competitive advantage” (Hubbard, 2009: 181).
2.1.2 The concept of Triple Bottom Line
Sustainability is believed to be based on three interconnected pillars, namely economic prosperity, environmental quality, and social justice, which can also be recognized as the 3Ps – people, planet, and profit (Elkington, 1997; Bansal, 2002; Elkington, 2013). These three principles are widely acknowledged as the Triple Bottom Line (TBL), a term initially introduced by John Elkington in 1994 and later gaining currency after the publication of his book, “Cannibals with forks: The triple bottom line of 21st century
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that individual businesses and gradually the entire economies would have to perform when the 21st century was approaching.
Figure 1: Sustainability – The Triple Bottom Line (Carter & Rogers, 2008: 365)
However, there was some controversy regarding the usefulness of the term; according to Norman and MacDonald (2004: 7), the TBL was redundant to contemporary discussions on corporate social responsibility, which constitutes a quite similar idea, generally defined as “a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis” (Commission of the European Communities, 2001), and that “what is novel about 3BL is not sound”. They asserted that the social bottom line made no sense because it is impossible to quantify an organization’s social performance to produce a “bottom line” result such as the financial bottom line. Hubbard (2009) also held the same opinion when he claimed that measuring social and environmental performance was not a straightforward task as they were specific to each firm or industry and usually quite difficult to be quantified. Nevertheless, the TBL is still popular among many big businesses; exemplars include General Electric, Unilever, Proctor and Gamble, and 3M (Slaper and Hall, 2011). They do not adopt an index-based TBL, but they do measure their sustainability performance based on the
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TBL concept. After all, the flexibility of the TBL allows companies to employ the concept according to their needs.
These concepts of sustainability and triple bottom line play a crucial role for clothing retailers and manufacturers, as they do not exist in a vacuum but rather in a circle with various stakeholders, and their decisions and corresponding actions inevitably have impacts on those stakeholders. In view of the increasing public concerns of social and environmental problems, industry practices are bound to undergo changes (Turker & Altuntas, 2014), especially when there has a shift in power in the fast fashion industry from retailers to consumers (Barnes & Lea-Greenwood, 2006). This idea will be discussed in more depth in the following sections.
2.2 The emergence of fast fashion
Until the mid-1980s, apparels were manufactured in a large-scale and low-cost manner and with low diversity in styles since the design capabilities of the factories was limited (Brooks, 1979). A work shirt factory would only produce work shirts; that factory would have been “literally tearing itself apart” if it had to manufacture another product (Bailey, 2001: 35). Items such as jeans, men’s shirts, trousers, and underwear hardly had their designs changed for decades; however, there were still the exceptions of several women’s clothing styles and rapidly changing haute couture, which denotes highly sophisticated and high-end apparels targeted at the market segment with high income and social status (Brooks, 1979; Mazza & Alvarez, 2000; Bailey, 2001).
It was evident that consumers before the 1990s attached less importance to style and fashion, and favored basic clothing (Bhardwaj & Fairhurst, 2010); however, they later became more fashion-conscious (Bailey, 2001). At the beginning of the 1990s, Bailey and Eicher (1992) took note of a sudden rise in the import of apparel for women that were rather stylish and fashionable compared to the standardized apparel in the 1980s. In turn, rather than focusing on cost reduction for manufacturing, clothing retailers started responding to the new fashion trends by the expansion of their product range with new and ‘refreshing’ products (Barnes and Lea-Greenwood, 2006). At the same time, there has been a constant change in consumer demands, and contemporary women are updating and refreshing their wardrobes more frequently than they used
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to, even within a single fashion season (Mintel, 2003; Barnes and Lea-Greenwood, 2006). Furthermore, it became a growing trend for fashion businesses to increase the number of ‘season’, which means the frequency of changing the entire products within a store; in the case of the successful clothing retailer Zara, there might be as many as 20 micro-seasons per year (Christopher et al., 2004). Tyler et al. (2006) also noticed a similar trend of retailers launching more phases (3 – 5 phases) to the existing traditional seasons of Spring/Summer and Autumn/Winter. Crewe and Davenport (1991) cited in Tyler et al. (2006) indicated that garment suppliers were increasingly expected to introduce products in smaller batches within shorter lead times due to the extension of the number of micro-seasons.
Capturing the transitions in the fashion industry taking place around this period, the concept of “fast fashion”, also known as “quick fashion” or “street fashion” in Europe (Guercini, 2001; Doeringer and Crean, 2006) began to emerge. It was believed to be originally developed in France to meet the demands of teenagers and young adult women for trendy and reasonably affordable clothing (Doeringer and Crean, 2006). Barnes and Lea-Greenwood (2006: 4) defined fast fashion as “a business strategy which aims to reduce the processes involved in the buying cycle and lead times for getting new fashion product into stores, in order to satisfy consumer demand at its peak”. The authors (2006: 19) also found out that fast fashion is largely a consumer driven move – “reacting in season to maximize sales by responding to and satisfying consumer demand”. Furthermore, it is apparent that the concept of fast fashion revolved around response to changing styles, trends, and demand; both Christopher et al. (2004) and Doeringer and Crean (2006) contended that the cornerstone of fast fashion was the capability to promptly spot fashion trends, discover potential new fads, and transform them into products ready on the shelf in the shortest time possible. This idea of identifying a pattern and predicting the next accordingly, also called “shared situation awareness”, is believed to be the decisive element to the success of Zara, one of the pioneers in the fast fashion industry (Sull & Turconi, 2008).
2.3 Fast fashion supply chain management
The fast fashion industry has the same characteristics as the traditional fashion industry, including low predictability, high market demand volatility, high impulse
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purchase, and short life-cycle (Bruce et al., 2004; Christopher et al., 2004; Bhardwaj & Fairhurst, 2010). In order for fast fashion supply chains to adequately respond to those features, such strategies as lean or agile supply chain and quick-response system (Christopher et al., 2004) were utilized.
On the one hand, Naylor et al. (1999: 108) defined lean supply chain management as “developing a value stream to eliminate all ‘waste’, including time, and to ensure a level schedule”. Abernathy (2000) claimed that lean retailing requires quick product replenishment, and high rate of order fulfilment, punctuality, and accuracy. On the other hand, agile supply chain management means “using market knowledge and a virtual corporation to exploit profitable opportunities in a volatile market place” (Naylor et al., 1999: 108). There are several features of an agile supply chain, namely market sensitivity, in-time response to changes in demand, and use of information technology (Bruce et al., 2004). Christopher et al. (2004) presented a similar view, indicating that agile supply chains have shorter lead times, are demand-driven and information-based rather than forecast-driven and inventory-based like traditional supply chains. He also asserted that agility in clothing supply chains is indispensable due to the volatility and unpredictability of fashion markets. Nevertheless, Bruce et al. (2004) posited that textile and clothing supply chains are characterized by neither agility nor leanness solely, but by a mixture of the two – “leagile”. This enables companies in textile and clothing to provide fast product replenishment and maintain flexibility to keep pace with the volatility of consumer demand.
Considered the ultimate agility, quick response strategy has achieved growing popularity in the fashion industry (Christopher et al., 2004). Lowson et al. (1999) cited in Christopher et al. (2004:14) gave a definition for quick response as follows:
A state of responsiveness and flexibility in which an organisation seeks to provide a highly diverse range of products and services to a customer/consumer in the exact quantity, variety and quality, and at the right time, place and price as dictated by real-time customer/consumer demand.
What considerably differentiates quick response from traditional clothing supply chains is the tendency of collaboration and vertical integration to improve efficiency (Barnes & Lea-Greenwood, 2006). Sen (2008) considered these elements as prerequisites for quick response to be successfully implemented, arguing that information sharing
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between manufacturers and retailers is mandatory. Christopher et al. (2004) elaborated this idea further by proposing that fundaments of quick response include such factors as market sensitivity – quick response to consumer trends, virtual integration – shared information across all suppliers, networked logistical systems – leverage of partners’ capabilities, and process alignment – collaborative process and product planning and design. The importance of supplier engagement into the management of supply chain is once again reiterated in a research by Turker and Altuntas (2014), who conducted a content analysis of nine fast fashion firms’ corporate reports to examine their sustainable supply chain management. The authors discovered that these companies placed heavy emphasis on integrating suppliers into their system to ensure that they also comply to the same sustainability requirements.
Overall, according to Cachon and Swinney (2011), there were at least two components of a fast fashion system: (1) quick response – short production and distribution lead times, allowing for synchronization of supply with changing demand, and (2) enhanced design – highly trendy product design. The authors concluded with their research by saying that the two practices are more likely to have a complementary effect on each other (i.e. implementing one practice increases the marginal worth of the other) rather than substituting (i.e. implementing one practice decreases the marginal worth of the other), and that the more strategic the customers, the greater the extent of complementarity. Caro and Martínez-de-Albéniz (2014) suggested a basically similar but rather more holistic characterization of fast fashion business models, positing three elements: (1) quick response, (2) frequent assortment changes, and (3) fashionable designs at affordable prices. Despite its breadth, this definition does exclude several fashion retailers often mistakenly considered fast fashion, such as Old Navy, the sub-brand of Gap Inc., which offers reasonably-priced clothing but does not employ the quick response system (Caro & Martínez-de-Albéniz, 2014). The quintessence of success in the fast fashion industry must be Zara, with its acclaimed business model of quick response (Barnes & Lea-Greenwood, 2006). Zara is well-known for its short lead times; new products are delivered to Zara stores twice a week, a delivery frequency that might only be “common in the grocery business, but in fashion retailing they are unheard of” (New Yorker, 2000: 74). Short lead times enable Zara to predict short-term trends and sale more accurately, minimize inventory obsolescence, and postpone fabric dying, which help yielding higher profit margins (Tokatli, 2008).
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2.4 Environmental sustainability in fast fashion industry
The emergence of fast fashion along with its distinctive characteristics from the traditional fashion industry have brought about negative impacts on the environment, the society, as well as the local economy of some countries such as those in Europe (DeBrito et al., 2008; Turker & Altuntas, 2014). Since this literature review aims to examine current literature about environmental sustainability in the fast fashion industry, this section focuses only on the environmental aspect of sustainability, excluding the social and economic aspect.
In response to the negative issues involved with the fashion industry, fast fashion retailers are increasingly adopting the sustainability mindset and undertaking sustainability initiatives (Caniato et al., 2012). Indeed, it is necessary for companies operating in sensitive business areas that, for example, exploit natural resources intensively or offer poor labor conditions, to put heavy emphasis on their sustainability strategies, which is the case of the fashion industry due to its intrinsic characteristics of excessive use of resource and the trend of outsourcing manufacture to low labor cost countries (Smith, 2003; De Brito et al. 2008).
2.4.1 The trend of global sourcing of clothing
MacCarthy and Jayarathne (2010) indicated that there has been a significant shift of clothing production from well-developed to less developed countries. According to the World Trade Organization (2015), among the top 10 clothing exporters in 2015 were China, Bangladesh, Vietnam, India, Turkey, Indonesia, and Cambodia. This global sourcing trend of the clothing industry is attributed to one of the two types of fast fashion retailers. Tokatli (2008) revealed two categories of retailers operating in the fast fashion industry: those with their own factories, such as Benetton and Zara, and those with no manufacturing facilities of their own, such as H&M and Mango. For example, according to the supplier list published on H&M official website, the fashion chain allocates their production at only 12 factories in its home country Sweden, while it outsources the heavy majority of its manufacture to countries such as China with 627 factories, Bangladesh with 305 factories, and Turkey with 283 factories (H&M, n.d.). Even Zara, the Spanish apparel retailer which gained “the reputation of being one of the exceptions to globalization” has started to source their production offshore to Morocco, Bulgaria,
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Turkey, Vietnam, and so on (Tokatli, 2008: 21). This practice of offshoring production has led to adverse consequences on the environment due to transport-related energy consumption and harmful emissions (Caniato et al., 2012; Turker & Altuntas; 2014). Furthermore, the issue is aggravated even further by the quick turnaround time pressured by fast fashion industry, which results in higher carbon footprint because of the use of airfreight (Saicheua et al., 2012). In addition, when shipped by sea or by land, clothes are often packaged as ‘retail-ready’ in the containers, hanging on bars or strings; in this way, only 30% of container capacity is utilized compared to full capacity with clothes packaged in flat-packs (Saicheua et al., 2012).
2.4.2 The “unsustainable” characteristics of the fashion industry
2.4.2.1 Impacts of cultivating raw materials
Apart from the impact of global sourcing, the fashion industry imposes further burdens on the environment due to its nature. The production processes of clothing extensively exploit natural resources and heavily use chemical products (De Brito et al., 2008). This can be seen, for instance, through the growth of cotton and the creation of polyester; these two fibers together dominate more than 80% of the global textile market (Simpson, 2006). Cotton, the most important natural apparel fiber in the world, has been under the examination of various literature (Clay, 2004; Chen & Burns, 2006; Fletcher, 2008; Lakhal, 2008; Grose, 2009; Saicheua et al., 2012). Cotton is a natural cellulosic fiber, a renewable and biodegradable resource; therefore, it is believed by many to be an environmentally-friendly product (Chen & Burns, 2006). On the contrary, cotton grown conventionally is actually one of the major enemies to the environment due to its need for high levels of chemicals to account for its susceptibility to insects and fungi (Lakhal, 2008; Chen & Burns, 2006). It takes intensive use of pesticides and insecticides to grow conventional cotton; this fiber takes up roughly 25% of global insecticide consumption and 11% of global pesticide consumption according to Clay (2004). Environmental issues such as severe human health problems, water and air pollution, insect and weed resistance, depleted soils, and loss of diversity are several issues that are caused by these chemicals (Grose, 2009). However, substantial use of chemicals is not the only downside of conventional cotton; growing this textile fiber also requires a considerable amount of water. It takes 7000 – 29000 liters of water to produce 1 kilogram of cotton fiber, which can merely be processed to make one pair
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of jeans (Clay, 2004). Fortunately, many of these issues caused by cotton cultivation can be addressed by cultivating cotton organically, which is a process that requires much less pesticides, fertilizers, and other toxic chemicals (Fletcher, 2008). The overall product toxicity of organic cotton is dramatically reduced by 93% compared to conventional cotton (Allwood et al., 2006).
In contrast to cotton, polyester is a synthetic fiber, yet it is also widely popular with the reputation of being the “workhorse fiber of the industry” (Chen & Burns, 2006). While polyester consumes less water and land, it uses non-renewable resources and its emissions into air and water if not treated can cause medium to high damage to the environment (Fletcher, 2008; Shen & Patel, 2010). Compared to cotton, polyester only needs approximately 0.1% of the amount of water that cotton requires; however, manufacturing 1 kilogram of polyester consumes on an average 63% higher energy than producing the same amount of cotton (Kalliala & Nousiainen, 1999; Fletcher, 2008). The reason for such intensive energy consumption is that petrochemicals are the key ingredients in polyester manufacture; the petroleum is not only utilized as a raw material but also a source of energy for the conversion process of the fiber (Fletcher, 2008). During its production, polyester not only releases into the air toxic emissions that can lead to or worsen respiratory diseases but also discharges harmful substances into the wastewater (Claudio, 2007; Saicheua et al., 2012). Fortunately, recycled polyester, an alternative to virgin polyester, is much more environmentally-friendly as it uses PET – polyethylene terephthalate, the same material that is found in clear plastic bottles, as its raw material (Chen & Burns, 2006; Fletcher, 2008). This makes good use of the thrown-away plastic that otherwise would end up in landfills. Furthermore, the environmental impact of recycled polyester is discovered to be more positive than its virgin counterpart due to its roughly 85% lower air pollution (Chen & Burns, 2006).
2.4.2.2 Impacts of processing fibers
Apart from obtaining fibers, there are also environmental concerns associated with processing fibers to fabric and garment. The dyeing process is highly resource intensive (Fletcher, 2008; Saicheua et al., 2012); a kilogram of fiber consumes nearly 80 to 100 liters of water to dye (Anyangwe, 2010). Additionally, the dyeing process
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discharges effluent that still contains color from the dye, which is the source of metal pollutants such as zinc, copper, and chromium (Fletcher, 2008). If this discharge is untreated, it can have detrimental effect on waterborne biodiversity and enter the human food chain (Greenpeace International, 2011). Generally, darker shade will result in a greater amount of dye going into effluent, so the problem can be alleviated by avoidance of dark shade (Fletcher, 2008). Another issue related to the processing of fibers is non-renewable energy consumption such as fossil fuel and nuclear power from use of machinery during the knitting, weaving, and manufacturing process (Saicheua et al., 2012).
2.4.2.3 Impacts of textile waste
It is estimated that nearly 75% of the 2.35 million tonnes of clothing and textile discarded by consumers in the UK ends up in landfills (Allwood et al., 2006). A proportion of that waste is made from non-biodegradable synthetic fiber (Saicheua et al., 2012); other natural fibers do decompose yet producing emissions of toxic gases such as methane or ammonia during the process, which are pollutants to both air and water (Fletcher, 2008). In terms of the other 25% of textile waste that is recovered, they are either reused, repaired and reconditioned, or recycled (Fletcher, 2008). Reuse, which involves collecting, sorting, and reselling as second-hand clothes, “brings significant environmental savings” (Fletcher, 2008: 100). Repair and reconditioning requires more resources as retrieving, fixing, and upgrading the products need labor and additional materials (Fletcher, 2008). Recycling uses resources the most, yet still less than producing new items even with the most complex processes (Fletcher, 2008). However, Aakko & Koskennurmi-Sivonen (2013: 16) maintain that recycling materials consumes energy for the mechanical or chemical processing of fibers and respinning them into new yarns, which means it is “a way of managing waste, but not a way of reducing it”.
Another issue associated with textile waste is the release of microplastic fibers, or microfibers, during domestic laundry of synthetic fibers, particularly polyester (Bruce et al., 2016; Hartline et al., 2016; Pirc et al., 2016). Microplastics, plastic particles smaller than 5 mm, are a new pollutant found in freshwater and marine environments (Andrady, 2011; Hartline et al., 2016). They can easily enter airborne organisms such as plankton
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(Wright et al., 2013) and get entangled in their stomach, consequently reducing feeding activity (Bruce et al., 2016). Furthermore, the ingestion of microplastics can lead to the absorbed chemicals being leached, which in turn become a source of toxic substances impacting the organisms and entering the food chain upward to humans (Koelmans et al., 2013). Dangerous as they are, microplastic fibers are released into the environment in every domestic wash (Hartline et al., 2016; Bruce et al., 2016; Pirc et al., 2016). Washing experiments were conducted by a number of researchers in both front and top-load household washing machines for polyester fleece jackets and sweaters, and it was discovered that there are approximately 0.16 to 2.7g microfiber mass shedded per garment per wash, with increased shedding as garments age (Hartline et al., 2016; Bruce et al., 2016). Additionally, the amount of microfiber mass recovered from top-load machines is much more considerable than that from front-top-load machines, which was found to be seven times larger by Hartline et al. (2016) in comparison with 2.7 times by Bruce et al. (2016). Although this issue of microfiber pollution occurs during the consumption phase of consumers, it is of significant implication for fashion managers and manufacturers in terms of their use of materials and their strategy to mitigate the impact of this type of pollution.
2.4.3 Different approaches to improve environmental performance
A number of sustainability measures have been adopted to improve environmental performance in the fashion industry. At the industry level, various environmental standards and programs have been introduced by industry associations and alliances or not-for-profit organizations, including Global Organic Textile Standard1, Better
Cotton Initiative2, Zero Discharge of Hazardous Chemicals3, and Sustainable Apparel
Coalition4. Furthermore, alternative sustainable fibers have also been developed, such
as man-made cellulosic fibers which originate from sustainably forested wood pulp as
1 Global Organic Textile Standard: acknowledged as the world’s leading processing standard for textiles
made from organic fibers, involving strict environmental and social criteria in the entire organic textile supply chain (http://www.global-standard.org).
2 Better Cotton Initiative: a program that aims “to make global cotton production better for the people
who produce it, better for the environment it grows in and better for the sector’s future.” (BCI, n.d.)
3 Zero Discharge of Hazardous Chemicals Programme: a program that encourages manufacturers in
the textile, leather, and footwear value chain to improve the environment and people’s well-being. (www.roadmaptozero.com)
4 Sustainable Apparel Coalition: the apparel, footwear, and textile industry’s leading alliance for sustainable production (www.apparelcoalition.org)
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a substitute for cotton, and recycled polyester for conventional virgin polyester (Saicheua et al., 2012).
At the corporate level, fashion chain managers have taken active steps towards pursuing a green strategy. Caniato et al. (2012) examined environmental sustainability in fashion supply chains through their exploratory case-based research and revealed that product design practices are considered the core element of an environmentally sustainable strategy. In doing so, fashion company decision-makers keep a green mindset from the beginning of the design process and choose to use organic or recycled materials, manufacture a recyclable product, and use recyclable and reusable packaging. Production processes are also considered important; companies that have their own manufacturing facilities try to incorporate clean technologies and natural production processes such as natural leather drying (Caniato et al., 2012). In addition, mitigation of environmental impact through supply chain design plays a significant role; for retailers that outsource their production, strict compliance system, frequent monitoring and auditing of their supply partners are put in place (Turker & Altuntas, 2014). Many firms also focus on logistics and distribution optimization, attempting greener transports via, for example, vehicle routing, which is planning the transport route for minimal carbon emissions (Caniato et al., 2012).
This literature review has made an attempt to synthesize and review relevant constructs and researches in the fields of environmental sustainability and fast fashion. While prevailing researches produce persuasive findings and profound insights, certain gaps and shortcomings still exist. Firstly, a research that investigates the environmental impact especially of the fast fashion industry is still missing. Secondly, there has not been any literature that examines the different practices that can be adopted to achieve better environmental sustainability performance in a detailed, structured, and holistic manner. Besides these gaps, however, this literature review sets a strong theoretical foundation for further progress of the thesis. Furthermore, the review of literature on the “unsustainable” characteristics of the fashion industry has provided answers for the first research question of this study, which is “What are the environmental impacts of the fast fashion industry that make environmental sustainability a challenge for this sector?”. This provides insights that certainly helps to clarify and broaden the understanding of the topic.
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2.5 Conceptual framework
Figure 2: Conceptual Framework
The above-illustrated conceptual framework serves as a basis for the next analysis stage of this thesis. It is largely based on the research framework presented in a research conducted by Caniato et al. (2012). In the framework, sustainability practices are categorized according to the Three-Dimensional Concurrent Engineering framework by Fine (1998), which has been further applied to environmentally responsible manufacturing practices by Ellram et al. (2007). There are particularly three categories (Ellram et al., 2007; Caniato et al., 2012):
• Product Design: involves issues such as design specifications, quality, materials, and packaging.
• Process Design: concerns production processes from raw materials to the finished products, including manufacturing methods, technology, equipment, and such like.
• Supply Chain: encompasses insourcing and outsourcing, logistics system, relationships with stakeholders in the supply chain, especially suppliers and customers.
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On the other hand, the categorization of environmental performance is based on the latest Global Reporting Initiative (GRI) Sustainability Reporting Standards, the first global standards for sustainability reporting on a range of economic, environmental, and social impacts (www.globalreporting.org) as well as the most popular framework according to KPMG (2017). Considering the scope of this thesis, only the environmental standards by the set of GRI are utilized. Eight aspects belong to the general standardized environmental standards, while one aspect, “business integration”, is industry-specific for the Apparel and Footwear Sector. Below is an overall view of the indicators encompassed in each aspect (GRI, 2016):
• Materials: use of non-renewable or renewable materials; use of recycled input materials; percentage of reclaimed products and their packaging materials.
• Energy: energy consumption within and outside the organization; energy intensity; reduction of energy consumption; reduction in energy requirements of products and services.
• Water: amount of water withdrawn; number of water sources affected by withdrawal of water; amount of water recycled and reused.
• Biodiversity: details of operational sites related to areas of high biodiversity value; impact of activities, products, and services on biodiversity; and protection or restoration of habitats.
• Emissions: direct and indirect emissions of greenhouse gas (GHG), ozone-depleting substances (ODS), and other significant air emissions; reduction of GHG emissions.
• Effluents and Waste: water discharge by quality and destination; weight of hazardous and non-hazardous waste by disposal methods; water bodies affected by water discharges.
• Environmental Compliance: fines and non-monetary sanctions for non-compliance with environmental laws and regulations.
• Supplier Environmental Assessment: new suppliers that were screened using environmental criteria; negative environmental impacts in the supply chain and actions taken.
This structured and holistic framework is a useful fundament for the corporate reports’ content analysis process, the methodology of which will be discussed in more depth in the following section.
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3 METHODOLOGY
As the literature review has provided answers to the first research question, the rest of this paper aims to seek answers to the other research questions, which are:
RQ 2: Which practices have been adopted by fast fashion firms to tackle the challenge of environmental sustainability and to improve their environmental performance?
RQ 3: How do fast fashion companies assess their environmental performance? As these questions are exploratory by nature, this paper is correspondingly an exploratory study. In order to answer the aforementioned questions, actual practices and measures of performance of fast fashion firms must be explored and then compared to find commonalities. One research method that would effectively serve this purpose is case study, which involves careful and complete observation and analysis of processes and their interrelationship (Kothari, 2004). Case study in this particular research would allow for direct interaction with fast fashion companies and their managers, hence in-depth exploration of environmental sustainability practices and their measures. However, another more accessible secondary source of information that provides sufficiently comprehensive details about these aspects is corporate annual report or particularly sustainability report. With these qualitative data, the method of content analysis can be adopted. According to Milne and Adler (1999), content analysis is the most common research technique to assess organizations’ social and environmental disclosures. Taking this point as well as this study’s scale and allotted time frame into account, the content analysis method has been chosen over case study.
3.1 Data collection and sample selection
The sample for this study consists of five fast fashion brands that are selected from a list compiled by Caro and Martínez-de-Albéniz (2014), namely H&M, Zara, Gap, Uniqlo, and Mango. Since no known clothing brand describes itself as offering fast fashion clothing, reference to an external source is necessary in order to identify companies operating in this sector. In their study, Caro and Martínez-de-Albéniz (2014) assembled the list of fast fashion firms by performing a frequency count of brand names associated with the exact phrase “fast fashion” in all media publications from 2012 to 2013 using the Factiva database. This was followed by a validation check,
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which involves performing a similar frequency count in all PDF documents available through the Google search engine that contained the phrase “fast fashion”. The result of those measures performed by the authors are illustrated in Figure 2.
Table 1: Frequency count of apparel companies’ in media publications that refer to "fast fashion" (Caro & Martínez-de-Albéniz, 2014: 3)
With the aim of having a comparable data set, five of the top-ranking brands that (a) publicize their corporate annual or sustainability reports, and (b) prepare their reports in accordance with the GRI standards are chosen, which results in a final sample including H&M, Zara, Gap, Uniqlo, and Mango. Although the reports of Uniqlo and Mango follow an older version of the GRI standards, such version is still largely similar to the latest one, which means relevant information can still be found. The annual reports of the selected brands, which cover the fiscal year of 2016, are retrieved from their official website. As for Zara, Uniqlo, and Gap, the reports obtained entail the overall performance of all the brands associated with their parent company, which are Inditex (Zara), Fast Retailing (Uniqlo), and Gap Inc. (Gap). In the case of Gap, their GRI disclosures are retrieved mostly from the company’s Global Sustainability website.
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Table 2 provides overall basic information about the sample five firms that were collected from their corporate reports or official websites. As can be seen from the table, all five companies operate on an international scale, having strong and widespread presence all over the world.
Table 2: Overall Information on Sample Companies
Company Headquarter
Revenues (in millions of euros)
No. of
Employees No. of Stores
No. of Suppliers Inditex (Zara) A Coruña, Spain 23,311 162,450 7,292 stores in 93 countries 1,805 suppliers H&M Stockholm, Sweden 21,870 161,000 4,351 stores in 64 countries 1,826 suppliers Fast Retailing (Uniqlo) Yamaguchi, Japan 13,590 100,130 3,160 stores in 18 countries 184 suppliers (for Uniqlo only) Gap (Gap Inc.) California, USA 12,510 135,000 3,659 stores in 40 countries 900 suppliers Mango Barcelona, Spain 2,260 15,730 2,217 stores in 110 countries 611 suppliers Notes: Revenues in local currencies are converted to Euro according to the currency conversion rate as of March 6, 2018.
3.2 Data analysis method
Content analysis is a research method used for “making replicable and valid inferences from data to their context” (Krippendorff, 1989: 403), and Weber (1988) cited in Milne and Adler (1999: 1) posited that it involves codifying the content of a piece of writing into categories based on a set of criteria. In this study, the reports are analyzed and interpreted with the aim of exploring the environmental sustainability initiatives taken by large fast fashion firms based on the conceptual framework (Figure 2) presented in the previous section. Accordingly, relevant texts in the reports will be connected and categorized to delineate certain concepts through the use of specific words or themes. Specifically, this process is based on concepts related to practices and performance, which are the two general codes, presented in this paper’s conceptual framework
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(Figure 2). Each code has their corresponding sub-codes, as specified in section 2.5. – Conceptual Framework. The reports are scrutinized to see whether there are texts related to each code and sub-code, after which texts are recorded accordingly. The codes and sub-codes are as follows:
• Practices: (1) product design, (2) process design, and (3) supply chain.
• Performance: (1) materials, (2) energy, (3) water, (4) biodiversity, (5) emissions, (6) effluents and wastes, (7) environmental compliance, and (8) supplier environmental assessment.
4 FINDINGS
AND
DISCUSSION
Overall, the five companies attach considerable importance to sustainability in general and environmental sustainability in particular. Nearly all companies have a separate sustainability report apart from Inditex, which incorporates sustainability reporting into their corporate report as an integral part. Table 3 and Table 4 present the content analysis of those reports based on the conceptual framework, with the former about environmental practices and the latter about environmental performance reporting of the five fast fashion firms. Correspondingly, the results presented in Table 3 and 4 are aimed at answering the second and third research question respectively, namely (2) “Which practices have been adopted by fast fashion firms to tackle the challenge of environmental sustainability and to improve their environmental performance?”, and (3) “How do fast fashion companies assess their environmental performance?”
4.1 Environmental Practices
Information in the reports related to environmental practices as categorized is reported in Table 3 below.
Categories Inditex H&M Fast Retailing Gap Mango Product Design Overall design process • Creating garments
following Right to Wear philosophy.
• Environmentally-friendly products labelled Join Life, or Wear the Change.
• Incorporating circularity into design process.
• Environmentally-friendly products labelled Conscious.
• Using Life Cycle Assessment.
N/I • Building awareness and
education around sustainability for designers.
• Using Life Cycle Assessment.
N/I
Materials • Sustainably sourced materials, e.g. organic cotton and cotton from BCI, or
TENCEL®Lyocell.
• Recycled materials, e.g. polyester, wool, cotton.
• Focusing on upcycling,
the creation of new fibers of the same quality, Refibra™Lyocell.
• Sustainably sourced
materials, e.g. organic cotton, linen, hemp, jute, & silk, TENCEL®Lyocell & third-party certified down, rubber, wood, cotton from BCI & wool.
• Recycled materials, e.g. recycled cotton,
polyester, wool, cashmere, and plastic.
N/I • Sustainably-sourced
materials, e.g. wood-derived fabrics, sustainable cotton (organic, American-grown, and cotton from BCI).
• Sustainable synthetic
materials, incl. polyester, spandex, nylon.
Sustainable fibers, e.g. organic cottons, recycled cotton, recycled polyester, TENCEL®, among others.
Packaging • Reducing consumption of raw materials in
packaging.
• Using more sustainable
materials in packaging.
N/I N/I • Reducing packaging
weight or changing packaging materials to decrease overall waste volume or allow for greater recycling.
• Reusing or recycling
packaging.
• Packaging Waste
Prevention Business
Plan for reduction and
optimal use of product packaging.
• Using 100% recycled
materials in boxes, with paper sealing tape.
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Categories Inditex H&M Fast Retailing Gap Mango
Process Design Chemical management • Commitment to ZDHC Programme.
• The List programme:
aiming to improve quality of chemical products used in manufacturing of textile and leather products.
• Ready to Manufacture: a
code of good
manufacturing practices for wet process facilities.
• Green to Wear: a
standard that guarantees our wet production processes are environmentally responsible.
• Performance of RCA
when an item does not comply with Health and Safety requirements, then a Corrective Action Plan provided for facilities to avoid repetition.
• Commitment to ZDHC
Programme.
• Having their own
Restricted Substances List.
• Training for H&M Group chemists in Green Screen hazard assessment.
• Hazardous Substances
Control training pilot for suppliers.
• Environmental emission
evaluator to help supplier assess performance and proactively improve chemical usage and discharge.
• Having their own
Restricted Substances List.
• Regular review and
compliance with latest scientific guidelines to ensure safe use of chemicals.
• Stringent quality
standards against current best practices guidelines for partner factories.
• Commitment to ZDHC
Programme.
• Having their own
Restricted Substances List.
• Having independent 3rd -party laboratory to test for restricted chemicals in finished product. • Creating a hazardous substances standard, of mandatory compliance for suppliers. • Exhaustive analysis of sample of finished garment by a laboratory. Process Design Water stewardship
Master Plan for Water Management in the Production Chain: part of Global Water
Management Strategy, aiming at sustainable use
• Collaborating w/ WWF
• Building water-efficient equipment across own operations, harvesting rainwater, raising awareness among employees.
N/I Women + Water strategy:
partnering with fabric mills and laundries to reduce manufacturing impacts; adopting more water-efficient product design and sourcing practices.
N/I
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suppliers.
• Collaborating with STWI
to implement
sustainability guidelines that improve water practices in factories. Process Design Energy efficiency • LEED certified headquarters and centers; using electricity from renewable sources.
• Eco-efficient stores: reduced electricity consumption (HVAC systems) & water usage; purchasing electricity from certified renewable sources.
• Within H&M Group: new technologies for lighting, heating, ventilation, and air-conditioning (HVAC) systems, purchasing/ self-generating renewable energy, installing solar panels on some buildings.
• Across value chain:
supplier energy efficiency programs; encouraging business partners to use renewable energy.
Investing in renewable energy, e.g. wind, micro-hydroelectric.
Energy-management solutions for retail operations, updating HVAC systems and exploring renewable energy options, installing LED lighting at stores.
N/I
Supply Chain
Suppliers • All suppliers subject to policies and standards and required to register the factories involved in production. • Pre-assessment audit system - evaluation of potential suppliers. • Continuous development of supplier training to improve factories. • Effective auditing to ensure all suppliers and manufacturers comply with Code of Conduct
• All suppliers signing Code of Ethics and Sustainability Commitment and receiving dedicated training. • Supplier Impact Partnership Program: used as a
pre-assessment for potential suppliers, to support suppliers in improving sustainability
performance, & to help monitor and measure
• Pre-contract monitoring.
• Conducting
environmental audits at partner factories and in-depth environmental assessments using SAC's Higg Index tool.
• Introducing Code of
Conduct for second-tier fabric manufacturers.
• Responsible Mill
Program: rolling out the Higg Index with fabric manufacturers, or mills, collaborate with strategic
• All manufacturers signing Vendor Compliance Agreement.
• Tier 1 suppliers trained on Code of Vendor Conduct (part of VCA) on an ongoing basis.
• Supplier Sustainability Assessment Manual: used to assess and remediate issues.
• Encouraging first and second-tier suppliers in conducting environmental footprint • Allowing manufacturers to only subcontract production to companies authorized by Mango. • Manufacturers required to sign social, employment, and environmental Code of Conduct for manufacturers. • Conducting preliminary
analysis & audit of factories before 1st orders.
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Action Plans where possible defaults are detected.
suppliers' compliance & assess implementation of Sustainability Commitment. (SIPP based on Higg Index facility module and own KPIs)
• Rewarding partners who
maintain a good sustainability performance.
suppliers to improve environmental
performance, using the Higg Index. assessments, SAC’s Higg Index. • Mill Sustainability Program: expanding sustainability programme beyond direct suppliers to strategic mills.
• Training from all
departments involved in manufacturing process and CSR for new suppliers.
• Quality control team periodically visiting different factories and checking if any aspect of Code of Conduct is breached.
Supply Chain
Logistics • Green to Pack
programme: improving shipment density, filling distribution trucks as efficiently as possible, and using these trucks as a reverse logistics channel to transport items returned to our stores.
• Using thinner plastic bags to transport clothing.
• All logistics centers having an ISO 14001 certified environmental management system. • Having indicators to measure efficiency of shipments. • Working to reduce
energy used in logistics, transport, and
warehouses.
• Transport service
providers controlled by environmental programs and required to be part of Clean Shipping Project.
N/I • Taking part in SmartWay
Shipper Program.
• Commitment to using
cleaner modes of transportation and encouraging use of fuel-saving strategies and technologies.
• Cross-docking system
used for initial deliveries to stores, which consists of pre-established assortments prepared by supplier.
• Optimization of load times and volumes of deliveries.
• Mainly using sea transport.
• Distributing hung garments on coat hangers from supplier to distribution center and from there to nearest stores --> optimized use of packaging and of space.
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Categories Inditex H&M Fast Retailing Gap Mango
Customer Engagement and Awareness
Closing the Loop program: reuse and recycling of textile
products - placing specific containers to facilitate donation by customers; also initiating free home collection service for clothing donations.
• Providing customers with
climate-friendly ways of caring for clothes, and encouraging them to use products longer, reuse, and recycle.
• Clever Care label on
garments in washing instructions.
• Garment collecting
initiative, then reusing or recycling (making products using post-consumer textile wastes).
Collecting garments and redistributing to others in need; recycling those that are not wearable.
N/I • Project to collect clothing
in stores for textile recycling; items collected from stores processed at KOOPERA recovery and recycling sites, where they are classified & given a second life.
• Stores providing customers with bags made of recycled paper or certified paper.
Abbreviations: BCI: Better Cotton Initiative, CSR: Corporate Social Responsibility, KPI: Key performance indicator, RCA: Root Cause Analysis, SAC: Sustainable Apparel Coalition, STWI: Sweden Textile Water Initiative, WWF: World Wide Fund for Nature, ZDHC: Zero Discharge of Hazardous Chemicals.
Indeed, Gap Inc. (2017) revealed in their report that approximately 80% of products’ environmental impact is attributed to decisions made in design and development. However, as for Fast Retailing, no information on their product design practices was found. An overall view of product design practices of the other four companies are presented as follows:
1. Overall design process: As the two largest companies in the sample according to their revenue and size, both H&M and Inditex have separate labels that signify more environmentally-friendly products, Conscious and Join Life/Wear the Change respectively. Products with these labels are either made up of more sustainable materials or produced with processes that have less environmental impact. Furthermore, Life Cycle Assessment5 (LCA) comes across as a common practice
by H&M and Gap. H&M conducts LCA to compare the overall environmental impact of recycled cotton and conventionally sourced cotton, while Gap performs LCAs to understand environmental impacts of the entire process – from design to manufacturing.
2. Materials: It is common practice among the four companies to have material choice as an indispensable part of their environmental sustainability initiatives. All companies choose to use sustainably sourced and recycled materials, the most common of which are organic cotton or Better Cotton from Better Cotton Initiative, TENCEL®Lyocell, recycled cotton, and recycled polyester. In this Material aspect, Inditex seems to be a pioneer when the company in collaboration with another company has developed a new high quality and sustainable material, Refibra™Lyocell, made from cotton waste and wood from sustainably managed forests.
3. Packaging: The main trend in terms of packaging practices is using more sustainable packaging materials and reusing/recycling packaging. Mango even has
5 Life Cycle Assessment: “tool to assess the environmental impacts and resources used throughout
a product’s life cycle, i.e.: from raw material acquisition, via production and use phases, to waste management.” (Finnveden et al., 2008: 1)
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its own Packaging Waste Prevention Business Plan, which aims to reduce and optimize use of product packaging and uses 100% recycled materials in boxes.
Overall these product design initiatives are bound to mitigate the environmental impacts of materials delineated in the literature review section to some extent. However, it is worth mentioning that the amount of sustainably sourced or recycled materials used by the sample companies only constitutes a fraction of the total materials. Thus, the environmental burden imposed by raw materials is likely to remain as long as production volume stays unchanged or continues to increase and those resource-intensive conventional materials are still mainly used.
4.1.2 Process Design
Companies have many similar and different initiatives in order to reduce the environmental impact of their own or their suppliers’ production processes.
1. Chemical management: The majority of companies choose to partake in the Zero Discharge of Hazardous Chemicals and have their own restricted substances list or hazardous substances standard. H&M even takes an active step by sending their chemists for training in Green Screen hazard6 assessment and provides Hazardous
Substances Control training for its suppliers. Furthermore, several firms have a laboratory test for restricted chemicals in the finished products. As for Inditex, a root cause analysis is performed when an item does not comply with Health and Safety requirements.
2. Water stewardship: As for the companies that address water stewardship in their strategy, each of them has their own program and approach, but what they have in common is engagement and partnership with suppliers in the collective effort to use water sustainably.
3. Energy efficiency: A common practice for companies to improve their energy efficiency is installing a heating, ventilation, and air-conditioning (HVAC) system in their operational buildings and stores as well as using renewable energy. H&M even
6 GreenScreen® for Safer Chemicals: a method of comparative Chemical Hazard Assessment used to
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takes a step further by self-generating renewable energy, installing solar panels on some of their own buildings, and by engaging their suppliers, implementing supplier energy efficiency program.
It is undeniable that the process design practices that companies adopt will diminish the impact of processing fibers and producing garments in terms of chemical and water use. However, the initiatives to improve energy efficiency are mainly just on an internal scale of the sample companies’ own stores and buildings, while energy consumption by supplier factories certainly accounts for a considerable proportion due to the non-renewable energy used by machinery during the manufacturing process as discussed in the literature review.
4.1.3 Supply Chain
Since all five primarily contracts external factories to produce fabrics and garments, it is essential that they establish a close-knit working relationship with and maintaining direct control over their suppliers in terms of environmental performance. Logistics plays a major role as well, since transportation is one of the sources that releases the highest amount of carbon emissions according to data reported by the companies. 1. Suppliers: An approach that is taken by all companies in the sample to control their
first-tier suppliers is conducting a preliminary audit of the factories and then requiring them to sign the company’s code of conduct. Mango is even stricter in that they allow manufacturers to only subcontract production to factories known and authorized by Mango. Another necessary practice carried out by most of the companies is training their suppliers according to the company’s standards and conducting frequent audits. What also stands out as common practice is the incorporation of the Sustainable Apparel Coalition’s Higg Index, a tool for textile retailers and manufacturers to measure and score a company or product’s sustainability performance (www.apparelcoalition.org). In addition, H&M even develops the Supplier Impact Partnership Program based on the Higg Index as a tool to monitor suppliers’ compliance and support them in improving sustainability performance.
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2. Logistics: Each firm has a different set of practices to reduce the environmental impact of transportation. H&M only opts for transport service providers controlled by environmental programs, while Gap takes part in SmartWay Program 7
themselves. Both Inditex and Mango attempt to optimize load volume by filling distribution trucks as efficiently as possible. One intriguing practice that was found is Mango’s distribution of hung garments on coat hangers from suppliers to distribution centers and there to the nearest stores, which aims at optimized use of packaging and of space. In contrast, as previously discussed in the literature review, only 30% of container capacity is utilized when clothes are often packaged as ‘retail-ready’ (Saicheua et al., 2012). This is a small but interesting contradiction between reality and academic research.
Overall, the sustainability initiatives that involve suppliers are likely to minimize the overall environmental impact of the companies as suppliers directly produce what companies put on their shelf, playing a major role in the entire value chain. The same also applies to environmental strategies concerning logistics; however, in view of the increase in emission of scope 3 GHG, such strategies appear to be insufficient compared to the level of transportation and distribution that needs to be carried out. This will be discussed in further detail below in sub-section 4.2.1.
4.1.4 Customer Engagement and Awareness
Customer engagement and awareness was not part of the established conceptual framework; nevertheless, after the reports were analyzed, the category was added because it was constantly mentioned across the documents as integral environmental sustainability practices. As seen from Table 4, nearly all sample firms put strong emphasis on environmental initiatives that involve customers, which in the case of these firms is collection of old garments for the purpose of recycling, reusing, or making new products. This practice is bound to decrease the volume of textile waste released into the environment, thereby alleviating the pollution caused by such waste as discussed in the literature review. The majority of the collected garments are reused and made into new products, while the technologies for recycling blended textiles into
7 SmartWay Program: a program of the US Environmental Protection Agency that helps companies to
improve supply chain sustainability by measuring and improving freight transportation efficiency (www.epa.gov).
